First-time buyers might be wondering what the future holds for their aspirations to get a foot on the property ladder.
Official government data released yesterday showed that just 7,270 house purchases were made through the Help to Buy equity loan scheme in the three months leading to 30th September 2021, a staggering 46% down from the same period the previous year since new restrictions were implemented in April 2021.
The effect of the pandemic and change in the scheme eligibility criteria, mixed with the latest ONS data revealing the average house price to have reached record levels across the UK in December 2021, highlights once again the growing need for alternatives once the Help to Buy scheme comes to an end, especially if first-time buyers want to see a light at the end of the tunnel.
A rush to the suburbs in the race for space seems one of the main factors driving significant house price growth outside of major city centres.
Combined with a slowdown in construction output during the pandemic leading to an overall drop in available new build stock, the pressure is on for first-time buyers.
These trends have been compounded by the sharp increase in the cost of living.
Help to Buy has been a key tool in the Government’s arsenal to deliver a critical lifeline to those needing a helping hand to get on the property ladder.
But as the end to the scheme approaches, many first-time buyers are already turning to private alternatives to bridge the growing affordability gap.
New providers like Ahauz can also expand first-time buyers’ overall choice of properties to include existing property stock, an option that had not been available through the Government’s equity loan scheme.
Whilst Help to Buy equity loans have helped over 280,000 first-time buyers get on the property ladder, it did come with its limitations in the form of price caps and availability only in new builds.
Replacements to the highly popular equity loan scheme seem imperative to tackle the challenges of homeownership across England and Wales, especially in the North and Midlands where the tightening of the scheme rules, and house price growth has pushed many buyers out of the market.
Moreover, buyers of existing property stock have also had limited Government help to choose from, especially during recent times where support has been needed the most, leaving many trapped in rent or living with their parents without additional support.
Innovation in the financial services sector has already delivered alternatives which are proving to be extremely popular with first-time buyers and those experiencing affordability gaps climbing the property ladder.
Ahauz is one such new lender, launched by co-founders João Rocha and Karthik Srivats, who have experienced first-hand the challenges of getting on the property ladder. They launched Ahauz in September 2021 to offer home buyers an equity loan of up to 25% on any property.
Since its launch, Ahauz has been providing a valuable alternative to first-time buyers and home movers who might otherwise have struggled to get a foot on or climb the housing ladder or buy the home they really wanted.
Analysis of early Ahauz demand data has highlighted that the average age of an applicant is 31, shining a light on just how much longer it is taking for generation rent to achieve homeownership.
Karthik Srivats, Ahauz co-founder, said: “Since the end of the first lockdown, first-time buyers have continued to face the most challenging conditions to get on the property ladder.
“We are seeing tremendous demand nationwide already for those who need help to buy their first home. We expect that demand to grow even further as Government support, which is already restricted to just new builds, winds down.
“Ahauz is proud to be delivering a suitable alternative across England and Wales, ensuring that we have our generation’s back, and many fellow first-time buyers can make their homebuying dreams come true.”
